[MARKET ANALYSIS] European bourses earlier losses, tech underperforms as losses in South Korean giants weigh on the sector

European bourses (STOXX 600 +0.4%) initially started Thursday's trade on a softer footing but have climbed off their lows, with all indices in the green, outside of the AEX (-0.3%). Sentiment overnight was on the softer side, following another tech selloff in South Korean stocks (Samsung -9.1%, SK Hynix -14.6%) after Meta plans to sell excess AI compute to build a cloud business, raising questions over excess in AI capacity. However, with Europe lacking the big AI giants, this seems to support the Euro area.
Sectors point to a positive bias. Optimised Personal Care (+2.1%) tops the sector pile, followed by Food, Beverages & Tobacco (+2.0%) and Health Care (+1.5%). As expected, Technology (-1.9%) is the clear sector laggard and the only sector in the red.
An update for KNDS: the Co. has postponed its IPO due to volatility, and will wait until "market conditions become more favourable." The decision was hampered following the 19% drop in Rheinmetall after the German government abandoned its contract for warships. This drove European defence stocks lower, which complicated negotiations over the sale by Wegmann of a 40% stake to the government.
Key movers include: Currys (-3.1%), despite FY adj. pretax profit and adj. EBIT beat estimates while announcing a GBP 50mln share buyback programme; Roche (+2.1%), announced that its divarasib met its primary and key secondary objectives in a head-to-head clinical trial that beat existing therapies; Pandora (+3.6%), upgraded to neutral at UBS.
US equity futures are softer across the board, with the NQ lagging as it gets weighed on by the tech selloff in Asia. An update for Google (-1.1%), the European Court of Justice ruled against the Co. over its EUR 4.1bln Android fine.